Mahanagar Gas Ltd looking at lower prices for late night CNG customers

By: |
Mumbai | January 12, 2016 8:24 PM

Facing a serious demand crunch, Mahanagar Gas Ltd (MGL), the sole supplier of compressed natural gas (CNG) in the megapolis, today said it may bring in differential pricing of fuel for late night consumers.

cngFacing a serious demand crunch, Mahanagar Gas Ltd (MGL), the sole supplier of compressed natural gas (CNG) in the megapolis, today said it may bring in differential pricing of fuel for late night consumers. (Reuters)

Facing a serious demand crunch, Mahanagar Gas Ltd (MGL), the sole supplier of compressed natural gas (CNG) in the megapolis, today said it may bring in differential pricing of fuel for late night consumers.

“Though CNG price is 30-40 per cent cheaper than both petrol and diesel in Mumbai, the utilisation level is very low not only in the city but across the country,” MGL MD Rajeev Mathur said at event organised by PHD Chamber here.

Reeling out the numbers to drive home his point, he said the utilisation level of the nearly 15,000 km of gas pipelines across the country is a low 40-50 per cent.

However, he did not specify what is the utilisation level in the city.

In Delhi, which is the largest market, only about 40 per cent is the demand over supply.

“Dropping the CNG price by Re 1 a kg may or may not give you the desired results but we will look at it very closely to lower prices at night,” Mathur said noting that the gas prices are competitive.

Mirroring the crude oil glut and the resultant fall in the prices which is down almost 75 per cent (today trading a tad over USD 30 a barrel) global natural gas prices are also down massively.

Last week Oman had nearly slashed its supply price to India after the government threatened to scrap its contract signed at USD 15 per mmscd.

Mathur observed that nearly half of the city’s CNG stations are under-utilised.

“Between 10 pm and 6 am in the morning, CNG stations hardly attract any consumers and this is a major concern for us,” he said but did not offer a specific number.

“During peak hours, CNG users have hardly 2-3 minutes waiting time but the perception is that filling CNG takes longer, bringing down consumption,” he added.

However, Mathur said the city would continue to add close to 15 CNG stations every year to make sure that consumers have sufficient availability of the fuel. The MGL chief further urged the corporates to shift to usage of the gas for their businesses. “Enough gas” and infrastructure to supply it is available but the companies are not demanding the fuel, he said.

“About 15,000 km of pipelines already exist across the country but the utilisation is only 40-50 per cent,” Mathur said.

“Industry should come forward to use gas. Maybe they are using cheaper alternatives which pollute today but to what consequence,” Mathur noted.

According to him, natural gas constitutes 7 per cent to energy basket now and expressed the hope will go up to 20 per cent in next few years.

Meanwhile, addressing the conference, joint secretary at the Oil Ministry Ashutosh Jindal emphasised on increasing use of gas as a feed stock and appealed to the industry to come forward for its optimum utilisation.

He noted that demand for natural gas for industrial application has been declining since 2011-12.

He, however, noted that domestic consumers are consistently seeking PNG connections to their houses.

“A strong message is coming from the consumer that gas needs to be supplied to them,” Jindal added.

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